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China's listed companies part of the Tender Offer System Analysis

Author: LiShiGuang From: www.yourpaper.net Posted: 2009-10-16 08:00:55 Read:
Abstract: The tender offer is divided into a general offer and a partial offer. Part of the acquisition of the offer from the tender offer began, that the intention to purchase some of the shares of the target company's intention to purchase all of the shares of the target company's the comprehensive acquisition offer from the tender offer began. In general, part of the offer is to continue to maintain the listing status of the target company for the purpose, based on the target company to withdraw from the general offer for the purpose. Comprehensive to be approximately merger target company, the part to be approximately achieved the target company's relative control over. Not all of the tender offer applies to part of the offer, the partial offer only applies to an agreement to acquire trigger the tender offer and the Stock Exchange, the Securities and Exchange trigger a tender offer to acquire the two situations. But with the controlling shareholder of the listed company equity dilution, part of the tender offer will become the main way of the acquisition of listed companies in China.
Keywords: listed companies; offer; acquisition system

A part of the Tender Offer System to establish

China has established securities market since the acquisition of listed companies, the coexistence of the two systems of an agreement to acquire the tender offer. In practice, the vast majority of the listed company acquisition by agreement. The agreement to acquire acquisition outside the stock exchange, with the major shareholders of the target company agreed to be acquired in the price, quantity and other aspects, to purchase the shares of the target company, to achieve the purpose of control of the company. More favorable agreement to acquire the desire to control the acquisition of the target company, can bypass the small and medium-sized shareholders of the target company, the rapid control of the target company. Lower the cost of the agreement to acquire, purchase price is generally lower than the share price of the secondary market. An agreement to acquire the Target Company applicable to equity is more concentrated, especially in the presence of the controlling shareholder of the target company. But an agreement to acquire the limitations: an agreement to acquire general in the acquisition of the target company's controlling shareholder, the information less transparent, easy to insider trading and market manipulation; agreement to acquire the exclusion of minority shareholders, is contrary to the principle of equal opportunities . So many countries are excluded from the legislation, the legality of the agreement to acquire At present, only the United States, the United Kingdom, Canada, several well-developed securities market, the the complete regulatory measures remains an agreement to acquire. Due to historical reasons, China has long been the state-owned shares and legal person shares in circulation, the vast majority of listed companies in the controlling shareholder, in this case, the acquisition desirous of obtaining the target company control over, only the acquisition by agreement. So, our institutional recognition of the legality of the acquisition agreement. After the split share structure reform, in equity round circulation under the new situation, the need for an agreement to acquire existing greatly reduced, but because we are faced with a lock-up period in the size of the non impossible, after the expiration of the short term sold a large number, the majority of listed companies there is still the reality of the controlling shareholder, remains an agreement to acquire the institutional. The tender offer is the Offeror to the target company on the open market is not a specific number of shares holders make an offer, commitment to the acquisition of a certain proportion or number of shares at a particular price. Tender offer transparency, the shareholder equality of opportunity, and the degree of market-oriented and high, which is an agreement to acquire are not available. So our system retained an agreement to acquire the same time, strengthen the system construction tender offer. Among them, the most important initiatives is the establishment of a partial tender offer system and trying to make a partial tender offer to become the main way of the acquisition of listed companies. First implemented on January 1, 2006, amended the "Securities Act" expressly provides that the acquisition may take a partial offer to acquire listed companies. September 1, 2006 issued by the China Securities Regulatory Commission to implement the revised listed company acquisition management approach "(August 27, 2008 again revised implementation) on the provisions of the Securities Act of refinement, so as to establish a listed company part of the tender offer system.

Second, part of the tender offer comprehensive comparison of the tender offer

The tender offer is divided into a general offer and a partial offer. Part of the offer is less than 100% of the shares and the acquisition of a listed company to obtain control of the company behavior. Comprehensive offer to the Offeror to acquire all of the shares of a listed company's behavior. General offer than a partial offer, have different characteristics.
First, from the purpose of the acquisition, the intention to purchase some of the shares of the target company's acquisition of the offer from the tender offer began, that the intention to purchase all of the shares of the target company's the comprehensive acquisition offer from the tender offer began. In general, the part of the offer is to continue to maintain the listing status of the target company for the purpose of general offer based on the target company to withdraw from the market for the purpose of. Comprehensive to be approximately merger target companies, mergers and buyouts. The part to be approximately achieved the target company's relative control over, holding buyouts.
The second results from the acquisition, the comprehensive offer results: First, the acquisition of all the shares of the target company. Second, in the case of the shareholders of the target company agreed to sell all of the shares held by or part of the shareholders do not agree to the sale of shares, the Offeror to acquire only part of the shares. The results with the results of the partial offer, there is no difference, except that the starting point is different. Furthermore, a comprehensive offer to the actual acquisition equity ratio is too low, so that the distribution of equity still meet the listing requirements, but also to maintain the listing status of the target company. Therefore, the target company to withdraw from the market is not the inevitable result of a general offer. Partial offer, the acquisition of the stake is set too high, so that the distribution of equity does not meet the listing requirements, the target company can also lead to delisting. However, in the case of a partial offer, the Offeror to determine the proportion of equity acquisition, the proportion of equity acquisition can be limited to maintain the listing status of the target company within.
Third, from the cost of acquisition, part of the offer prior Lock For the acquisition of the target company equity ratio, can reduce the cost of acquisition. Taken a general offer, whether it is the acquisition of 100% of the shares of the target company at or below 100% of the equity, the acquisition of the stake will be very high, the cost of acquisition.
Fourth, from the acquisition of more market-oriented part of the tender offer prior Lock For the acquisition of the target company's equity ratio and the deadline date is not waiting, the offeree easy to make into a game state, do not fully understand the purpose of acquisition, motivation , it is difficult to make informed decisions. General offer to adequate time and right: the sale of shares by the offeror during the offer period to sell all of the shares held. And terminate the listing of the target company, the right to offer the same conditions to the Offeror to sell unsold or part of the sale of the remaining equity in the acquisition period. Therefore, comprehensive offer to the market is higher than the partial offer.
Fifth, the rights of content from the acquisition by the offeror, the legislative intent of the tender offer is to protect the interests of small shareholders, given its evacuation of the rights of the target company. Of minority shareholders to make investment decisions based on the target company's current control over the situation, if the target company control over the transfer of minority shareholders will lose the original basis for making investment. Now that they are unable to affect the transfer of control over, and should have at least a fair chance to withdraw their investments. With them to sell shares on the market, will bring the stock price plummeted and losses. Therefore, the legal compulsory acquisition issued an open offer to the target company shareholders the opportunity to sell their shares at a fair price. At this point, the partial offer is only given to small and medium-sized shareholders withdrawal from the company's rights and comprehensive offer to the evacuation of all rights given to small and medium-sized shareholders. Third, part of the contents of the Tender Offer System

(A) of the applicable conditions of the offer
Some offer only applies to two situations: First, an agreement to acquire the tender offer is triggered. This is a limited agreement to acquire a certain percentage of the equity interest in the Target Company, in excess of the percentage of the acquisition should be carried out by way of tender offer. The tender offer, we can take a general offer can also take partial offer. Section 96 of the Securities Act, the provisions of paragraph 1: "acquisition by agreement of the Offeror to acquire by agreement and other arrangements with others to jointly acquire the issued shares of a listed company 30%, to proceed with the acquisition, it should be listed company acquired all or part of an offer of shares issued to all shareholders of the listed company. issued free of charge by the State Council Securities Regulatory agencies offer except acquisition management practices of listed companies have the same requirements. The second is to trigger a tender offer to acquire the securities trading of the stock exchange. This refers to the acquisition of human desires to obtain the goal of control of the company through stock exchange transactions, only within a certain percentage of the equity of the target company, exceeded the proportion of acquisition should be carried out by way of an offer, or take a general offer, or to take part of the way of an offer. 88 (1) of the Securities Act provides that: "securities transactions through the stock exchange, investors hold or through agreements and other arrangements with others to reach 30% of the issued shares of a listed company held, continue acquired shall issue all or part of the acquisition of listed companies shares offer to all shareholders of the listed company acquisition management practices of listed companies have the same requirements.
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